Home  /  Transfer of Property Act  /  Section 38

Section 38: Transfer by person authorised only under certain circumstances to transfer

Transfer of Property Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1882
Section 37 All 137 Sections of Transfer of Property Act Section 39

Legal Commentary & Landmark Judgments: Section 38

Section 38 protects bona fide transferees for value who deal with persons authorized to transfer property only under certain circumstances (such as legal necessity), provided the transferee made reasonable inquiries.

  • Conditional Authority to Transfer: Where any person is authorized only under certain circumstances in their nature variable to transfer immoveable property (e.g., Hindu Karta, widow, guardian).
  • Reasonable Inquiries Test: The transferee for consideration shall be deemed to have established the existence of those circumstances if he made reasonable inquiries as to the existence of such circumstances and acted in good faith.
  • Protection Against Co-Parceners: Shields purchasers from subsequent challenges by minors or reversioners alleging lack of legal necessity.
Key Landmark Precedents:
  • Kesar Singh v. Santokh Singh, (2007) 12 SCC 301: The Supreme Court affirmed that a purchaser from a Karta or limited owner under Section 38 is protected if they demonstrate reasonable inquiry into the existence of legal necessity or benefit of estate.
  • Sunil Kumar v. Ram Parkash, (1988) 2 SCC 77: Settled that coparceners cannot maintain an injunction against the Karta; their remedy is to challenge alienation under Section 38 post-sale.
Courtroom Practice & Strategic Litigation Guidance:

When buying ancestral property from a Hindu Karta, preserve written documentary evidence of the legal necessity (e.g., medical bills, education fees, tax arrears) and recite them in the sale deed to establish Section 38 inquiry defense.

Section 37 All 137 Sections of Transfer of Property Act Section 39